Japan and India have agreed to a deal to increase their bilateral currency exchange rate to 50 billion dollars from 15 billion dollars with an aim to stabilize global financing markets, including emerging nations'.
The Finance Ministry said the deal was reached during talks held on the sidelines of the G-20 summit in Russia between Indian Prime Minister Manmohan Singh and Japanese Finance Minister Taro Aso, who also serves as Deputy Prime Minister, to strengthen the bilateral financial cooperation between the two nations, the Japan Times reports.
Both the nations also reaffirmed that it was necessary to bring reforms in financial and investment sectors in order to promote stable capital inflows into India in the long term, the report added.
The move comes amid global concern on anticipated U.S. Federal Reserve's lowering down its monetary stimulus, which could trigger an outflow of capital from emerging nations and a depreciation of their currencies.
It is being speculated that this U.S. move will lead to inflation that would hurt the economies of the emerging nations.
